Patents

Software Patents are a Frustrating Mess

The recent news that Yahoo! was suing Facebook for patent infringement unleashed a torrent of blog posts and Tweets. Many felt that Yahoo!, once a internet startup itself, had crossed the line by suing another startup. While it may eventually pay dividends, assuming the role of a patent bully has the potential to turn the entire industry against the company.

Another company, AOL, is dealing with a group of activist investors that also wants to see the company unleash its arsenal of software patents on the media and technology industry. Over the next few years we could see the portals wage a litigious war of mass destruction. The result could stifle innovation and exacerbate a situation that is already a significant burden on the media and technology industry.

At the root of all of this is a patent system that appears broken. Technology startups are often encouraged to obtain patents to prove that they own defensible intellectual property, thus making the company more valuable to investors. This process of filing patents requires time and money—the two resources that are in shortest supply at a startup. In a best-case scenario it can take years to get a patent—if you get one at all.

Larger technology companies acquire patents through the startups that they buy, as well as their own patents they get through the course of developing new products. Over time, companies like Yahoo! and AOL amass a great stockpile of patents. The temptation, which Yahoo! has given in to, is to make money by successfully suing other companies.

And then there are other companies that do nothing but acquire software patents for the sake of suing any company of means that could conceivably be infringing on their “rights.” These patent trolls don’t make anything or do anything with the patents other than sue people over them. The practice has become so pervasive that when a technology startup is acquired, often 10% of the purchase price is put into escrow to cover any potential patent lawsuits. If a patent troll does sue, those millions of dollars are paid out to the lawyers over a number of years as they endlessly litigate the case. The result is a tax on business where neither the entrepreneurs nor the investors that built the company benefit.

Surely, this is not what was intended when the patent system was created.

The problem with software patents today is that they are being used to protect ideas, not just designs. Yahoo!’s suit includes patents for things like “an ability to share things with certain friends,” “messaging your friends,” and “customizing a home page.” These ideas are so broad and widely adopted that if Yahoo! were to win their suit it could set back innovation in media and technology industry for years. With all the risks associated with starting a company, who is going to build the next Facebook or Pinterest if they think the reward for being successful will be to be sued into oblivion?

Software, like art, is the crafty combination of many ideas and styles, all of which are based on other ideas and styles. This process of mixing different elements to create something new is the same whether it is a painting, a piece of music or software. In this way, software is really just another form of self-expression.

What we need to do is treat software as art. Copyright law and design patent law are constructed to protect specific designs and expressions, not ideas. This would mean, for example, that the Yahoo! home page could not be copied but the ideas that underlie it could be shared freely, without threat of a lawsuit.

It’s time to end software patents and treat software as art.

Greg

I have always been a fan of setting time limits for commercializing a patent — meaning that if you are issued a patent, you have 2 years to bring it to market. If you do not bring it to market in that time period, you lose the patent rights. By creating a burden of commercialization in the patent system, we severely limit the damage done by patent trolls (whether they be litigious lawyers or large companies).